Israel axes funds to Palestine

Upset at Palestinians’ successful UN bid, Israel on Sunday said it would withhold nearly $115 million in taxes and other funds it collects for the cash-strapped Palestinian Authority.

Israel said the money would be used to offset the debt Palestinians owe to Israel’s Electric Corporation.

Angered by the successful attempt by the Palestinians to seek non-member observer status at the UN, Tel Aviv has already decided on expansion of its settlements On West Bank, including promoting a construction project in a controversial area that could effectively divide the occupied territory into two parts.

Israel’s cabinet also unanimously decided to reject the UN decision to upgrade Palestine’s status stating that the UN General Assembly decision “will not serve as the basis to future negotiations with the Palestinian Authority and it cannot advance a peaceful solution”.

The confiscation of funds totalling NIS 460 million (about $115 million), which are utilised for paying salaries to PA officials, does not come as a surprise as Israel had warned of the move ahead of the UN vote.

“I have no intention of transferring the tax payments to the PA this month. I plan to use them to offset the Palestinian debt to the Israel Electric Corporation,” Israel’s Finance Minister Yuval Steinitz said on Sunday at the cabinet meeting.

Steinitz referred to the Palestinian UN bid as a “provocation and an attempt to further a state without recognising Israel, demilitarisation or any security arrangements.”

In November, when the Palestinian leadership was still mulling over the UN option, he had said: “If the Palestinians continue to advance their unilateral move they should not expect bilateral cooperation. We will not collect their taxes for them and we will not transfer their tax revenues.”

On Thursday, Palestinians won a virtual approval from the world for their longstanding quest for statehood with an overwhelming support at the UN General Assembly that isolated Israel and the US.

At the start of the weekly cabinet meeting, Israel’s hawkish prime minister justified his punitive response against the Palestinians over the UN approval. Netanyahu emphasised that Israel “will continue to build in Jerusalem and in all the places of the State of Israel’s map of strategic interests”.